Executive pay, female representation in top management and firm performance. A study of S&P 500 companies.

Abstract: This master thesis investigates the influence of both executive pay and female representation in top management on firm performance. As recent trends in both pay-performance sensitivities and women in executive positions suggest a positive relationship of firm performance with both executive pay and female representation in top management, a nine-year panel data regression is run on the S&P 500 companies to study the potential effects of both CEOs' pay and the presence of female CEOs on corporate performance in the time frame 2010-2018. This research mostly focuses on the components of executive pay which constitute incentive packages, as the topic of incentive pay has become more and more prominent in recent years. We find that executive compensation is strongly positively related to corporate performance, and that the option awards component of executive incentive pay has the strongest influence on firm performance. We furthermore find that the executives' gender is not correlated to corporate performance.